Ferro-Alloy Resources (LON:FAR) adds UK£23m to market cap in the past 7 days, though investors from three years ago are still down 54%

This month, we saw the Ferro-Alloy Resources Limited (LON:FAR) up an impressive 308%. But that doesn't change the fact that the returns over the last three years have been disappointing. Tragically, the share price declined 54% in that time. So it is really good to see an improvement. While many would remain nervous, there could be further gains if the business can put its best foot forward.

The recent uptick of 82% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Ferro-Alloy Resources

Ferro-Alloy Resources isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last three years, Ferro-Alloy Resources saw its revenue grow by 7.0% per year, compound. Given it's losing money in pursuit of growth, we are not really impressed with that. It's likely this weak growth has contributed to an annualised return of 16% for the last three years. It can be well worth keeping an eye on growth stocks that disappoint the market, because sometimes they re-accelerate. After all, growing a business isn't easy, and the process will not always be smooth.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Ferro-Alloy Resources' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Ferro-Alloy Resources shareholders have received a total shareholder return of 30% over the last year. That certainly beats the loss of about 3% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Ferro-Alloy Resources is showing 5 warning signs in our investment analysis , and 3 of those are a bit concerning...

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.